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VOL. 42 | NO. 29 | Friday, July 20, 2018

IRS nominee clears Senate panel despite Democrat opposition

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WASHINGTON (AP) — The Senate Finance Committee narrowly approved on a party-line vote President Donald Trump's choice to become the new head of the IRS, with the panel's Democrats protesting the nomination because of a new IRS policy allowing some groups to hide their donors' identities.

The 14-13 vote Thursday with majority Republicans prevailing sent the nomination of Beverly Hills tax attorney Charles Rettig to the full Senate. All the Democrats voted against his nomination even though they considered him qualified for the job.

Critics say the new policy will let more dark money — including from foreign interests — flood into the U.S. political system.

Earlier in the day, a session weighing Rettig's nomination broke into a debate over the policy lifting donor disclosure requirements for thousands of groups, including those spending millions of dollars on political ads.

Groups that will benefit include so-called social-welfare organizations, business leagues and labor unions. Among them are sections of the U.S. Chamber of Commerce, the National Rifle Association and a group linked to the billionaire Koch brothers.

The Democrats say they needed to register their concern over the new IRS policy and are demanding to meet with Rettig to discuss it.

"The Trump administration has taken a qualified nominee and dumped him right into the middle of a dark-money political firestorm," said Sen. Ron Wyden of Oregon, the Finance Committee's senior Democrat.

News of the Trump administration policy change came Monday, the same day federal prosecutors charged a gun-rights activist living in Washington with serving as a covert Russian agent gathering intelligence on U.S. officials and political organizations. Court papers show that the activist, Maria Butina, made efforts to use contacts with the National Rifle Association to develop relationships with U.S. politicians during the 2016 campaign.

The revelations of alleged Russian efforts to use the NRA as a conduit into political influence, coming soon after Trump's summit with Russian President Vladimir Putin, stoked the Democrats' furor over the IRS action as part of a string of related events.

Sen. Benjamin Cardin, D-Md., called the IRS move "a very partisan action by the Treasury Department," which oversees the IRS, and said "it jeopardizes our national security."

Committee Chair Sen. Orrin Hatch, R-Utah, had implored the Democrats to reconsider their position and not allow their "irritations" with Trump to color their action.

Hatch said the IRS faces the challenge of administering the massive new tax law enacted late last year, and Rettig is expected to work to modernize the agency's outdated technology to meet the job.

"For the IRS to implement the biggest tax overhaul in a generation, it is essential that the agency is fully staffed and led by a strong, capable commissioner," Hatch said after the vote. "The job of commissioner is further complicated by years of mistrust and scandals at the agency. Chuck Rettig is the right pick to both implement tax reform and restore trust in the IRS."

As a tax attorney, Rettig has represented thousands of individuals and companies in civil and criminal tax matters before the IRS and against it in court. His clients have included affluent taxpayers seeking to strike deals with the IRS to turn over information on offshore bank accounts in exchange for reduced penalties.

During the 2016 campaign, Rettig defended Trump's decision to break with tradition by refusing to release his personal tax filings. At his confirmation hearing last month, Rettig pledged to uphold the political independence of the IRS.

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